GM getting $220 million in Canadian government support for EV battery materials plant in Quebec

With construction underway at the site of the planned General Motors and Posco Future M cathode active materials plant in Bécancour, Quebec, the Canadian and provincial governments have disclosed the financial toll paid to attract the significant piece of the electric vehicle battery supply chain to the city.

The two levels of government agreed to support the plant with matching C$150 million ($110 million USD) contributions, totaling roughly half of the C$600 million ($442 million USD) in project costs, the parties said Monday.

“Quebec’s battery sector is up and running,” said Pierre Fitzgibbon, provincial minister of economy, innovation and energy in a release.

“Thanks to its natural resources, talent and renewable energy, Quebec is attracting the giants of the electrification industry. We will be announcing additional transformative projects shortly. Quebec is where the world’s greenest batteries will be produced.”

The U.S. automaker and its South Korea-based joint venture partner, previously called Posco Chemical, chose the city on the South Shore of the St. Lawrence River to build the new plant last March. Construction on the plant, officially dubbed Ultium CAM Assembly, was underway by earlier this year.   

Cathode active material, or CAM, is used for the positive electrode in lithium ion batteries. Today, it is typically a blend of lithium, nickel, manganese and cobalt, and makes up about 40 per cent of total battery costs, according to GM.

The CAM produced by the joint venture team in Quebec will supply Ultium Cells battery plants in the United States, and ultimately be integrated into cells in vehicles such as the Chevrolet Silverado EV, Cadillac Lyriq and Ontario-made BrightDrop delivery vans.

According to Posco, the Quebec plant will have an initial capacity to produce 30,000 tons of CAM. It will employ about 200 people once operational, and the site will have the “opportunity to grow,” said GM Canada President Marissa West.

“We are so pleased to once again have a strong GM manufacturing presence in Quebec, and we are looking forward to expanding the role that Canada plays in GM’s all-electric future,” she told reporters in Bécancour May 29.

Bécancour, midway between Montreal and Quebec City, is quickly becoming a hub for battery materials production.

It has racked up a range of confirmed and tentative plant announcements this year and last. Among others, Germany-based chemical company BASF shared plans in March 2022 for a separate CAM plant in the city; mining giant Vale said last June it was studying a nickel processing plant; and homegrown miner Nemaska Lithium began site-clearing work on a lithium hydroxide plant this January.

The Ultium CAM plant is set to be among the first battery materials sites to open in the city. Joint venture President Cha Chi-gyu said the work has “stayed on schedule” over the past 14 months, thanks to the company’s local construction and engineering partners.

But costs have increased since the project was first announced with a US $400 million (about CDN $540 million) budget.

“In recent months, escalating investment costs due to enduring inflationary effects and contrasting construction environments compared to those in Korea, have presented challenges,” Cha told reporters in Bécancour.

Posco, nevertheless, remains “dedicated” to the project and expanding its EV battery supply chain in North America, he added.

Cha said Ultium CAM will soon begin hiring and training permanent employees for the Quebec operation. The plant is scheduled to begin production in 2025.